Exhibit
10.12


 


AML
COMMUNICATIONS, INC.


 


FOURTH
AMENDED AND RESTATED 1995 STOCK


 


INCENTIVE
PLAN AS AMENDED AND RESTATED


 


JUNE 10,
2002


 


 


SECTION 1.  PURPOSE OF PLAN


 


This Amended and Restated Stock Incentive Plan (this “Plan”) is
intended to serve as an incentive to, and to encourage stock ownership by,
certain directors, officers and other persons employed by AML Communications,
Inc., a Delaware corporation (the “Company”), so that they may acquire or
increase their proprietary interests in the success of the Company and to
encourage them to remain in the Company’s service.


 


SECTION 2.  PERSONS ELIGIBLE UNDER PLAN


 


Any person, including any director of the Company, who is an employee
of or consultant to the Company or any of its subsidiaries (an “Employee”) and
any director of the Company who is not an Employee (a “Nonemployee Director”)
shall be eligible to be considered for the grant of options hereunder (each an
“Option”); provided that only persons who are employees of the Company shall be
eligible to be considered for the grant of “Incentive Stock Options” (as
defined herein).


 


SECTION 3.  OPTIONS


 


(a)          The
Committee (as hereinafter defined), on behalf of the Company, is authorized
under this Plan to enter into any type of arrangement with an Employee or a
Nonemployee Director that is not inconsistent with the provisions of this Plan
and that, by its terms, involves or might involve the issuance of
(I) shares of Common Stock, par value $.01 per share, of the Company
(“Common Shares”) or (ii) a Derivative Security (as such term is defined
in Rule 16a-1 promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as such Rule may be amended from time to time)
with an exercise or conversion privilege at a price related to the Common Shares
or with a value derived from the value of the Common Shares.  The entering into of any such arrangement is
referred to herein as the “grant” of an Option.


 


(b)         Common
Shares may be issued pursuant to an Option for any lawful consideration as
determined by the Committee, including, without limitation, services rendered
by the recipient of such Option.


 


(c)          Subject
to the provisions of this Plan, the Committee, in its sole and absolute
discretion, shall determine all of the terms and conditions of each Option
granted under this Plan, which terms and conditions may include, among other
things:


 


(i)                                     a provision
permitting the recipient of such Option, including any recipient who is a
director or officer of the Company, to pay the purchase price of the Common
Shares or other property issuable pursuant to such Option, and/or such
recipient’s tax withholding obligation with respect to such issuance, in whole
or in part, by any one or more of the following:


 

















 


(A)                              the delivery of
previously owned shares of capital stock of the Company (including
“pyramiding”) or other property, provided that the Company is not then
prohibited from purchasing or acquiring shares of its capital stock or such
other property,


 


(B)                                a reduction in the
amount of Common Shares or other property otherwise issuable pursuant to such
Option, or


 


(C)                                the delivery of cash or
a promissory note, the terms and conditions of which shall be determined by the
Committee;


 


(ii)                                  a provision
conditioning or accelerating the receipt of benefits pursuant to such Option,
either automatically or in the discretion of the Committee, upon the occurrence
of specified events, including, without limitation, a change of control of the
Company, an acquisition of a specified percentage of the voting power of the Company,
the dissolution or liquidation of the Company, a sale of substantially all of
the property and assets of the Company or an event of the type described in
Section 7 hereof; or


 


(iii)                               any provisions required
in order for such Option to qualify (A) as an incentive stock option (an
“Incentive Stock Option”) under Section 422 of the Internal Revenue Code
of 1986, as amended from (the “Code”), provided that the recipient of such
Option is eligible under the Code to receive an Incentive Stock Option and/or
(B) as performance based compensation described in Section 162(m) of the
Code (“Performance-Based Compensation”).


 


(d)         Notwithstanding
any other provision of this Plan, no Employee shall be granted Options for in
excess of 300,000 shares of Common Stock and no Nonemployee Director shall be
granted Options in excess of 50,000 shares of Common Stock during any one
calendar year.  The limitation set forth
in this Section 3(d) shall be subject to adjustment as provided in
Section 7 hereof, but only to the extent such adjustment would not affect
the status of compensation attributable to Options hereunder as
Performance-Based Compensation.


 


SECTION 4.  STOCK SUBJECT TO PLAN


 


(a)          The
aggregate number of Common Shares that may be issued pursuant to all Incentive
Stock Options granted under this Plan shall not exceed 3,000,000, subject to
adjustment as provided in Section 7 hereof.


 


(b)         The
aggregate number of Common Shares issued and issuable pursuant to all Options
(including Incentive Stock Options) granted under this Plan shall not exceed
3,000,000, subject to adjustment as provided in Section 7 hereof.


 


(c)          For
purposes of Section 4(b) hereof, the aggregate number of Common Shares
issued and issuable pursuant to all Options granted under this Plan shall at
any time be deemed to be equal to the sum of the following:


 


(i)                                     the number of
Common Shares that were issued prior to such time pursuant to Options granted
under this Plan, other than Common Shares that were subsequently reacquired


 

















 


by the Company pursuant to the terms and conditions of such Options and
with respect to which the holder thereof received no benefits of ownership such
as dividends; plus


 


(ii)                                  the number of Common
Shares that were otherwise issuable prior to such time pursuant to Options
granted under this Plan, but that were withheld by the Company as payment of
the purchase price of the Common Shares issued pursuant to such Options or as
payment of the recipient’s tax withholding obligation with respect to such
issuance; plus


 


(iii)                               the maximum number of
Common Shares issuable at or after such time pursuant to Options granted under
this Plan prior to such time.


 


(d)         The
“Fair Market Value” of a Common Share or other security on any date (the
“Determination Date”) shall be equal to the closing price per Common Share or
unit of such other security on the business day immediately preceding the
Determination Date, as reported in The Wall Street Journal, Western Edition,
or, if no closing price was so reported for such immediately preceding business
day, the closing price for the next preceding business day for which a closing
price was so reported, or, if no closing price was so reported for any of the
30 business days immediately preceding the Determination Date, the average of
the high bid and low asked prices per Common Share or unit of such other
security on the business day immediately preceding the Determination Date in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System (“NASDAQ”) or such other
system then in use, or, if the Common Shares or such other security were not
quoted by any such organization on such immediately preceding business day, the
average of the closing bid and asked prices on such day as furnished by a professional
market maker making a market in the Common Shares or such other security
selected by the Board.


 


SECTION 5.  DURATION OF PLAN


 


Options shall not be granted under this Plan after November 1,
2006.  Although Common Shares may be
issued on or after November 1, 2006 pursuant to Options granted prior to
such date, no Common Shares shall be issued under this Plan after
October 31, 2016.


 


SECTION 6.  ADMINISTRATION OF PLAN


 


(a)          This
Plan shall be administered by a committee (the “Committee”) of the Board
consisting of two or more directors, each of whom is a “non-employee director”
(as such term is defined in Rule 16b-3 promulgated under the Exchange Act, as
such Rule may be amended from time to time); provided, however,
that in the event the Committee is not comprised of two or more “non-employee
directors,” then (i) the Committee shall only be authorized and empowered
to recommend to the Board all things necessary or desirable in connection with
the administration of this Plan, including, without limitation, the things
listed in Section 6, (ii) all recommendations of the Committee
relating to this Plan shall be subject to final approval by the Board and
(iii) all references herein to the Committee shall be deemed to refer to
the Board; provided  further, that unless otherwise determined by
the Board, with respect to any Option that is intended to qualify as
Performance-Based Compensation, the Plan shall be administered by a committee
consisting of two or more directors, each of whom is an “outside director” (as
such term is defined under Section 162(m) of the Code).


 


(b)         Subject
to the provisions of this Plan, the Committee shall be authorized and empowered
to do all things necessary or desirable in connection with the administration
of this Plan, including, without limitation, the following:


 


(i)                                     adopt, amend and
rescind rules and regulations relating to this Plan;


 

















 


(ii)                                  determine which
persons are Employees and to which of such Employees, if any, Options shall be
granted hereunder;


 


(iii)                               grant Options to
Employees and Nonemployee Directors (provided that Nonemployee Directors shall
not be eligible to be considered for the grant of Incentive Stock Options) and
determine the terms and conditions thereof, including (A) the number of
Common Shares issuable pursuant thereto and (B) the exercise price for any
Option, provided that the exercise price of any option to purchase Common
Shares shall not be less than the Fair Market Value of a Common Share on the
date such option is granted, except that (1) the Committee may
specifically provide that the exercise price of any such option may be higher
or lower in the case of an option granted at the time an Employee commences
employment with the Company in assumption and substitution of options issued by
another company that are forfeited or cancelled at the time the Employee
commences employment with the Company, and (2) in the event an Employee is
required to pay or forego the receipt of any cash amount in consideration of
receipt of an option, the exercise price plus such cash amount shall equal or
exceed 100% of the Fair Market Value of a Common Share on the date the option
is granted;


 


(iv)                              determine whether, and
the extent to which, adjustments are required pursuant to Section 7
hereof; and


 


(v)                                 interpret and construe
this Plan and the terms and conditions of all Options granted hereunder.


 


SECTION 7.  ADJUSTMENTS


 


If the outstanding securities of the class then subject to this Plan
are increased, decreased or exchanged for or converted into cash, property or a
different number or kind of securities, or if cash, property or securities are
distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like,
or if substantially all of the property and assets of the Company are sold,
then, unless the terms of such transaction shall provide otherwise, the
Committee may make appropriate and proportionate adjustments in (a) the
number and type of shares or other securities or cash or other property that
may be acquired pursuant to Options theretofore granted under this Plan,
(b) the maximum number and type of shares or other securities that may be
issued pursuant to Incentive Stock and other Options thereafter granted under
this Plan, and (c) to the extent permitted under Section 3(e) hereof,
the maximum number of Common Shares for which options may be granted during any
one calendar year; provided, however, that no adjustment shall be
made under this Section 7 to the number of Common Shares that may be
acquired pursuant to outstanding Incentive Stock Options or the maximum number
of Common Shares with respect to which Incentive Stock Options may be granted
under this Plan to the extent such adjustment would result in such options
being treated as other than Incentive Stock Options; provided further that no
such adjustment shall be made to the extent the Committee determines that such
adjustment would result in the disallowance of a federal income tax deduction
for compensation attributable to Options hereunder by causing such compensation
to be other than Performance-Based Compensation.


 


SECTION 8.  AMENDMENT AND TERMINATION OF PLAN


 


The Board may amend or terminate this Plan at any time and in any
manner; provided, however, that no such amendment or termination
shall deprive the recipient of any Option theretofore granted under this Plan,
without the consent of such recipient, of any of his or her rights thereunder
or with respect thereto.


 

















 


SECTION 9.  EFFECTIVE DATE OF PLAN


 


The Stock Incentive Plan became effective on November 3,
1995.  The amendments to the Stock
Incentive Plan reflected in this Amended and Restated Stock Incentive Plan
shall be effective as of June  10, 2002, the date upon which it was
approved by the Board; provided, however, that no Options may be granted nor
may Common Shares be issued under this Amended and Restated Stock Incentive
Plan until it has been approved, directly or indirectly, by (a) the
affirmative votes of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the laws of the State of Delaware or (b) the written consent of
the holders of a majority of the securities of the Company entitled to vote.